Fab plant bought by data-storing company

by J. Craig Anderson - Jun. 2, 2010 12:00 AMThe Arizona Republic

Data-storage giant Western Digital Technologies Inc. said it plans to move into a north Phoenix silicon-wafer fabrication plant slated for closure and hire at least some of the workers for its own chip-making operation.

Microchip maker STMicroelectronics Inc. said it plans to shut down the facility in the coming months and lay off more than 400 workers as part of an ongoing plan to cease manufacturing operations in Arizona and Texas.

Western Digital, which does not currently have any manufacturing operations in Arizona, bought the 545,000-square-foot facility last week for $20 million, according to transaction records and analysis from Phoenix-based commercial real-estate firm CB Richard Ellis.

Western Digital spokesman Steve Shattuck said the facility, which sits on 33 acres at 1000 and 1100 E. Bell Road, is well-suited to meet the company's needs, manufacturing silicon wafers used in its popular line of computer hard drives.

A publicly traded company based in Lake Forest, Calif., Western Digital is listed on the New York Stock Exchange under the symbol WDC.

For now, Shattuck said the company is leasing the property back to STMicro for "a period of months" so the former owner can fill current orders from its suppliers before shutting down.

In 2007, the Switzerland-based STMicro announced that it would begin a phased withdrawal from chip-making operations in Arizona and Texas.

Company director of technical media relations Michael Markowitz said STMicro already has closed its former Carrollton, Texas, facility and plans to be out of the Phoenix plant within months, although he would not say how many.

At its peak, the Bell Road facility housed about 800 workers, but layoffs in 2008 and 2009 have trimmed that number down to about 540.

Markowitz said 110 members of the remaining staff work in jobs other than manufacturing and would be moved to another Phoenix-area location.

The other 430 employees would lose their jobs, he said.

But those job losses could be temporary, according to Shattuck.

"We will have the opportunity to rehire many of those workers," he said, adding that the skills and equipment involved in both companies' fabrication processes are nearly identical.

As it ramps up to full capacity, Shattuck said, Western Digital's staffing needs at the Phoenix plant would likely equal or exceed those of STMicro.